$3 Million Verdict in Fracking Case - Fluke or the Harbinger of Claims to Come?

In a highly anticipated verdict reached on April 22, 2014, a Dallas County Court at Law jury awarded the Parr family $2.925 million against Aruba Petroleum on a nuisance claim arising out of drilling in the Barnett Shale in Wise County, Texas, near their home. The vast majority of the verdict is attributable to an award of "soft" damages ($2.25 million for pain and suffering and $400,000 for mental anguish), with only $400,000 awarded for property damage. The Parrs were featured in the movie "Gasland Part II", which negatively portrayed fracking.

The Parrs originally filed suit against eight defendants comprised of operators and oil field services companies alleging that their activities including construction, operating earthen pits, fugitive venting, emissions, and fracking taking place anywhere from a quarter of a mile to one and three quarters miles from their home in Decatur, Texas, caused them to experience "serious health effects" and caused the devaluation of their property.

By the time of trial, Aruba Petroleum was the only defendant left in the case, and the only claim submitted to the jury was for nuisance. Nuisance is a particularly amorphous cause of action which is generally defined as a condition that substantially interferes with the use and enjoyment of land by causing unreasonable discomfort or annoyance to persons of ordinary sensibilities.1 A plaintiff is not required to prove fault on the part of a defendant in a nuisance action. The Parrs cleverly utilized nuisance law in a novel way. The proliferation of drilling operations in urban areas makes the use of this theory in this manner particularly troubling.

The Parrs claimed in the last petition filed before trial that they were no longer seeking to recover "personal injury damages" for any disease. Instead, they purported to only seek damages for pain and suffering and mental anguish, etc. caused by "discomfort rather than disease." The Parrs claimed that the large body of case law placing restrictions on toxic tort claims2 does not apply to damages claimed for discomfort in a nuisance action. The Parrs presumably relied on case law which holds that an award for discomfort in the context of a nuisance claim is not a personal injury claim.3 However, there is no reported decision in which a Texas court has addressed the issue of whether a claim for damages for headaches, ringing in the ears, dizziness, nausea, drowsiness, rapid or irregular heartbeat, tremors, confusion, irritation of the stomach, coughing, depression, asthma, etc. as alleged by the Parrs, falls within the definition of discomfort which is compensable in a nuisance action as opposed to disease which is not.4

The Parrs exploited a legal theory which has not been completely defined and which does not require proving fault on the part of the defendant. A good argument can be made that damages for "discomfort" in a nuisance action should be limited to annoyances caused by things such as noise, lights, and odors, and not the physical ailments claimed by the Parrs.5 Otherwise, there is no safeguard to ensure that the claimed physical ailments were in fact caused by the alleged exposure and that the defendant is responsible for that exposure. Just as important, the application of nuisance law to these types of claims effectively imposes strict liability on the defendant for potentially very large damage claims, since a nuisance claim does not require the plaintiff to show fault on the part of the defendant. Here there was no finding that the operations of the defendant violated any law or standard of care, and Aruba was still held liable for significant damages.

In the unlikely event that this verdict withstands appellate review, it would have widespread implications for the oil and gas industry.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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